Income Tax

Personal Allowance Increase from September 2008

Changes to the income tax higher rate band and personal allowance take effect from 7th September 2008. These changes are effectively backdated to the start of the 2008/9 tax year.

The 2008/9 personal allowance limit is £6,035 – an increase of £810 on the 2007/8 tax year.

To ensure that the higher rate taxpayers don’t benefit from this increase, the higher rate tax band (40%) will now start at £34,800 – just £200 more than the 2007/8 tax year.

Update : The personal allowance for 2009/10 will be £6,475 and the higher rate tax band (40%) for 2009/10 will be £37,400.